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Does collecting welfare beat working? Cato Institute thinks so

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-          Supplemental Nutritional Assistance Program (SNAP, formerly food stamps),

-          Medicaid,

-          Housing Assistance (either public housing, Section 8 payments, or other rent subsidies),

-          Utilities Assistance (including the federal Low Income Home Energy Assistance Program [LIHEAP]),

-          Women, Infants, and Children Program (WIC), and

-          The Emergency Food Assistance Program (TEFAP).

They computed the total value of these benefits by state for their profile family and compared them to median work-related incomes for each state.

One state's results - Connecticut

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I was especially interested in the numbers for my home state of Connecticut.   Connecticut's numbers appear in the table below (columns A and B only), extracted from the study's 50-state table. (Table 14, pp. 32-33)

by REW-0910

Using the study's own numbers, the profile family in Connecticut would receive $567 a month from TANF and $526 a month from SNAP.   Just about everyone who qualifies for TANF also qualifies for SNAP.

The study imputes to the family a monthly cost of $765 for Medicaid costs.   But those charges are paid directly to health care providers so the profile family never sees the money and is unable to manage its own health care costs.   It's unlikely that a single mother and two reasonably healthy kids incurs anywhere near this much in health care costs each month, but other welfare recipients, including many elderly and disabled people who account for 2/3 of Medicare spending, might have monthly bills of this size.

The study imputes a monthly housing cost of $1,181 to the profile family.   However, only 31.9% of welfare recipients receive any housing assistance at all.   So the $1,181 figure must be discounted to yield an "expectancy" figure that is much lower - $379 a month.   In many cases, the beneficiaries never actually handle this money so they are unable to manage the expense.

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(Note: this discounting is necessary so that when you multiply the expected benefit by the number of benefit recipients in the state you get the total state expenditure for that benefit.   Without discounting, the total expense would be vastly overstated.)

The profile family qualifies for payments under the WIC program of $104 a month.   But only about 61% of those eligible take advantage of WIC so that number most be discounted as well.   The expected value per profile family would be $64 a month.

The family qualifies for LIHEAP assistance in the amount of $56 a month.   But since only about 50% of those eligible receive this benefit, we discount the number to an expected value of $28 a month.

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Rick Wise is an industrial psychologist and retired management consultant. For 15 years, he was managing director of ValueNet International, Inc. Before starting ValueNet, Rick was director, corporate training and, later, director, corporate (more...)

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Not surprising at all. Democrats have been raising... by Bill Johnson on Wednesday, Sep 11, 2013 at 10:07:21 AM
Bill, Thanks very much for your comments. ... by Richard Wise on Wednesday, Sep 11, 2013 at 4:52:21 PM
Richard, I am not allowed to post articles. I trie... by Bill Johnson on Wednesday, Sep 11, 2013 at 5:49:45 PM
Bill, Thanks very much for your reply. &nb... by Richard Wise on Thursday, Sep 12, 2013 at 9:45:08 AM